MOST PROJECT CONTROLS deal with variance control. If there is a delta or difference between an actual and target, this variance or delta is a heads-up that something is wrong. The bigger the delta, the bigger the risk, the more the project manager sweats.
The reality is that most controls result in a reactive, fire-fighting mode of project management. Why? The project manager reacts to project events when there is a project variance spike. Even with trending and other sophisticated heads-up project tools, you're still reacting to circumstances and data.
A project audit is another way to get a heads-up on what's going on in a project or in a project office. It's a technique that's not often used but has much value for ensuring project control and capability—that is, the effectiveness of project controls and the capability of meeting requirements.
What can project auditing do for you? It can:
■ Supply independent and objective evidence to senior management on how a project management office or a portfolio of projects is running
■ Monitor corporate and functional project control effectiveness, efficiency, and economy
■ Ensure consistency within and across a portfolio of projects by ensuring the effectiveness of process management assurance, assurance, and controls
■ Provide follow-up on corrective and preventive action
■ Identify areas of project improvement.
There are different types of project audits:
Management audits ensure that corporate management provides sufficient resources, direction, and oversight of the project or program office. Next level down in the organization, these ensure the corporate vision is deployed from the project management office and into the discrete projects. This disconnect is the major failure of project management offices.
System audits ensure that project policies, procedures, and instructions are developed and consistently followed. You'll hear the refrain “do as you say, say as you do.”
Process audits ensure that project activities across and within projects are followed consistently.
Deliverable audits ensure project promises and deliverables satisfy stakeholders.
Greg Hutchins, PE, is a principal with QPE, a program, process, and project management advisory firm in Portland, Ore. QPE's core competency is leading/coaching project teams to do the right things right on time. He can be reached at 800-COMPETE or [email protected]. Comments on this column should be directed to [email protected].
What are the steps in a project audit?
Preparation. Notify the project manager of the impending audit.
Audit standards. Each audit assesses what is done against some standard, which could be a specification, plan, policy, or procedure.
Preliminary conference. Establish the audit purpose, direction, and ground rules.
Data acquisition. Collect project information through interviews, analysis, and review of documents.
Gap analysis. Identify the gaps between audit standards and what is currently done. Note or suggest corrective and preventive actions.
Closing conference. Review audit impressions, compliance problems, preliminary conclusions, and preliminary recommendations.
Feedback and action. Formally notify the auditee of audit results in writing. Ask the auditee to correct any deficiencies prior to approval. If the auditee does not agree with the recommendations and conclusions, then customer and auditee management may resolve the difference.
What are the benefits of project auditing?
Proactive project management. Probably the biggest benefit of project auditing is anticipating, controlling, and correcting project problems before they go critical.
Closed-loop corrective action. If a project problem does occur, corrective action focuses on the symptom and root cause so it doesn't recur.
Preventive action. Preventive action ensures that the project won't occur in the first place.
Value adding. Audits should only be conducted if they add organizational or project value.
PROJECT AUDITORS COME IN BASICALLY TWO FLAVORS:
Auditors that are independent and objective assessors serve the traditional function of compliance monitoring, assessment, and reporting—particularly useful in regulatory environments.
Progressive companies use project problem-solving partners for project monitoring. These project auditors understand project specifics and work with team members and project management to solve problems. Their mission is to add project value. In the process of gathering project information, they develop significant insight into the project activities, controls, and risk areas. As informed outsiders, they have the organizational, project office, project, critical path, and activity perspectives—something that the project manager may lose as he or she spends time working on project minutiae. ■
